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liability before choosing an investment option is critical. There are many tax-saving investment options available in the market that provides the benefit of tax-free income.

Here are few tax-saving investment options that you can consider to get maximum return on your investment:

1. ELSS or Equity-linked savings schemes

Equity-linked savings schemes (ELSS) are one of the most favoured investment options for low-risk investors. The two important features of ELSS you should know before investing are:

i) Investment in ELSS qualifies for tax benefit under Section 80C of the Income Tax Act, 1961. You can claim benefit up to a limit of Rs 1.5 lakh a year

ii) The amount invested in ELSS has a lock-in period of 3 years. Since ELSS invests in equity markets, the returns are not fixed and neither assured. Hence, most of the investment advisers suggest to be invested in ELSS funds for more than 5 years. ELSS funds could be best option for you if you are planning long term investment.

Investors may choose between dividend or growth option in ELSS. The Dividend option suits someone looking for a regular income (although not assured), whereas the Growth option is for someone looking to save for a long-term need.

2. PPF

Public Provident Fund (PPF) Scheme has been a favourite savings option for several investors for decades. The principal and the interest earned on PPF have a sovereign guarantee and the returns are also tax-free.

The good part with PPF is that you can start with just Rs 500 annual amount and extend it to Rs 1.5 lakh in a financial year. You can open a PPF account in your own name or on behalf of a minor of whom you are a guardian. It can be opened at any post office or bank.

The investment in PPF is best suited for investors who do not want volatility in returns, unlike equity asset class. However, when you are investing for long-term goals, it is better to take equity exposure, preferably through equity mutual funds rather than PPFs. You can try investing in tax saving ELSS funds instead of solely depending upon PPF.

3. EPF

Employees' Provident Fund (EPF) is another safe investment option for salaried individuals. EPFs not only help

through involuntary savings but also accumulate tax-free interest. In any organisation, an employee contributes 12 per cent of his basic salary each month mandatorily towards his EPF account. An equal share is contributed by the employer but only a portion (3.67 percent) goes into EPF and rest is added to employee's pension fund account.

If you are a salaried employee, you can claim tax benefit against your 12 per cent EPF deduction under Section 80C of the Income Tax Act, 1961, up to a limit of Rs 1.5 lakh a year. The interest rate on EPF keeps changing. The current rate is 8.65% for 2016-17.

4. ULIP

A hybrid product, Unit-linked insurance plan (ULIP), is a combination of protection and saving. Most of the ULIPs offer you 5 to 9 fund options with varying asset allocation between equity and debt. You can invest in ULIP for a duration of 15 or 20 years or more but the lock-in period is 5 years.

The good part is that the fund value on exiting the policy after 5 years of lock-in or on maturity is tax-free. ULIPS are suitable for investors who are comfortable in identifying and managing the ELSS schemes. ULIPS are good when used as a long term investment option or at least ten years away. However, if you want to exit the policy after 5-7 years, it could be a financially damaging decision.

5. SUKANYA SAMRIDDHI YOJANA

Started as a part of 'Beti Bachao Beti Padhao' campaign by the government of India, the Sukanya Samriddhi Yojana (SSY) is a small deposit scheme for the girl. The plan currently gives an interest rate of 8.5 per cent and provides the income-tax benefit under Income Tax Act.

A Sukanya Samriddhi Account for a girl child can be opened any time after the birth till she turns 10. The account can be created with a minimum deposit of Rs 1,000. The maximum amount allowed to be deposited in a financial year is Rs 1.5 lakh. The annual contribution towards Sukanya Samriddhi Yojana qualifies for tax benefit under Section 80C of Income Tax Act and the maturity benefits are non-taxable.

6. OTHER INSURANCE PLANS

Endowment, money-back or a whole life plan comes under tradition insurance options. These plans have a savings element in them and come with a fixed term and a fixed sum assured. The crucial points - your age, life coverage and period of policy - are what decide the premium of the plan. You are required to pay the premiums on time each year till maturity of the policy.

You can claim the tax benefit under Section 80C for the premium paid. The maturity value and the death benefit are tax-free.

I am self-employed, can I claim HRA benefit?

No, self-employed individuals cannot avail the HRA benefit, however, you claim deduction on rent paid under section 80GG if you meet the eligibility conditions.

Do I have to pay tax on interest received on the tax saving FD?

Yes, the interest received on a tax saving FD is taxable as per the income tax laws.

How can I claim tax deduction on education loan?

Section 80E of the Income Tax Act allows an individuals to claim deduction on interest paid on an education loan. The education loan can be taken for self or spouse or children.

Can I claim the tax deduction on the health insurance premium paid for my parents?

Yes, individuals can claim the tax deduction for health insurance premium paid for their parents.